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NEW YORK - On Monday, TreeHouse Foods, Inc. (NYSE:THS) announced it has entered into a definitive agreement to be acquired by Investindustrial for $2.9 billion, despite reporting mixed third-quarter results.
The private brands food manufacturer’s shares surged 18.32% in pre-market trading after the announcement.
The company posted adjusted earnings of $0.43 per share for the third quarter, missing analyst expectations of $0.57. Revenue came in at $840.3 million, slightly below the consensus estimate of $851.99 million and essentially flat compared to $839.1 million in the same quarter last year, representing a minimal increase of 0.1% YoY.
TreeHouse’s third-quarter performance was impacted by a non-cash goodwill impairment loss of $289.7 million, resulting in a net loss of $265.8 million. The company’s adjusted EBITDA declined to $91.6 million from $102.5 million in the prior-year period.
"In light of the pending transaction, TreeHouse Foods will not host its conference call previously scheduled for today, and the Company is withdrawing guidance," the company stated in its release.
The revenue increase was primarily driven by favorable pricing to recover commodity inflation, the acquisition of the private brand tea business, and distribution gains. However, these positive factors were offset by volume declines related to broader macroeconomic consumption trends, distribution losses, planned margin management actions, and the company’s exit from the ready-to-drink business.
Gross profit margin improved to 18.8% from 15.6% in the third quarter of 2024, an increase of 3.2 percentage points. This improvement was largely due to $17.5 million of insurance recoveries related to voluntary product recalls received during the quarter.
Due to the acquisition announcement, TreeHouse has withdrawn its financial guidance and will no longer provide forward-looking projections.
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